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Thursday, 23 March 2017

UAE bankruptcy no longer leads straight to prison

UAE bankruptcy no longer leads straight to prison:

"Pervez, a British businessman, set up a building materials supplier just before Dubai’s financial crisis began in 2008. The small-scale operation started as the emirate’s real estate boom turned to bust, with state-owned developers repaying only a fraction of the invoices outstanding for goods and services owed. Scraping through this difficult period, his business flourished as a new building boom gripped Dubai — seen as a safe haven — in the aftermath of the Arab Spring of 2011. But the return of another crunch since 2014, sparked by the regional oil price slide, led to a chain of late payments throughout the construction industry. “Customers just chose not to pay,” says Pervez. (He would only use his first name.) That meant owners were running away, because if they bounced a cheque they would face jail. “Half my market ran away,” he says. “People take as much credit as they can and run.” As the situation worsened, his bank froze hundreds of thousands of dirhams in his personal account, further limiting his ability to service debts. Last year, as due dates approached on cheques he had guaranteed, Pervez also chose to flee, to his native Britain. His staff dismembered his business once news of his departure spread."

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